Leslie's, Inc. Announces Fourth Quarter & Fiscal 2025 Financial Results

Core Insights - Leslie's, Inc. reported fourth quarter sales and adjusted EBITDA that exceeded the high end of its guidance range, indicating a positive operational performance despite challenges [1][2] - The company plans to close 80 to 90 underperforming stores and one distribution center, which is expected to yield immediate EBITDA improvement for fiscal year 2026 [1][2] - Leslie's aims to improve its cost structure by reducing inventory by approximately 10% year-over-year and achieving direct cost reductions of $7 million to $12 million, which will be reinvested into enhancing customer value [2] Financial Performance - For the fiscal fourth quarter ended October 4, 2025, sales were $389.2 million, a decrease of 2.2% from $397.9 million in the prior year period, with comparable sales down 6.5% [5] - Gross profit increased to $150.1 million, up 4.8% from $143.2 million in the prior year, resulting in a gross margin improvement to 38.6% from 36.0% [5] - The company reported a net loss of $162.8 million compared to a net loss of $9.9 million in the prior year, with adjusted net income at $0.8 million, down from $4.4 million [5] Strategic Initiatives - The strategic transformation plan focuses on strengthening the balance sheet, optimizing cost structures, and rebuilding stakeholder confidence [2] - The company anticipates generating the majority of its sales and earnings during the second half of fiscal year 2026, driven by the seasonal nature of the pool and spa care industry [7] - Full year fiscal 2026 expectations include sales guidance of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million [8] Balance Sheet and Liquidity - As of October 4, 2025, available liquidity was approximately $168 million, with no borrowings under the asset-based lending facility [1] - Cash and cash equivalents decreased to $64.3 million from $108.5 million as of September 28, 2024, while inventories decreased by 11.2% to $208.0 million [13][30] - The company recorded impairments totaling $183.8 million, primarily related to goodwill and asset write-offs for underperforming stores [5][30]